How to File Bankruptcy in Ohio

Bankruptcy & Foreclosure : What to Keep When Filing Bankruptcy

Although most of this video takes place in Los Angeles, problems like this are being caused by foreclosures all across the United States, including Ohio. I have heard many complaints by local realtors that by the time they get a buyer for a house, the house is in such bad condition that it isn’t saleable any more.

The big banks are not set up to be caretakers or landlords of buildings. And the homes and condos stay vacant so long, that neglect alone is a problem, not even counting the possibility of vandalism.

Real estate sales in Ohio are still quite low, which is confirmed by the May sales figures from RealtyTrac. One of the problems is that even when a buyer is interested in buying real estate, banks are reluctant to allow them to borrow, even when their credit scores are good. May home sales in Columbus were down 25% from May 2010, which is an echo of what is happening all over the state.

There is nowhere in Ohio that has been spared from the foreclosure, short sale and price reductions in homes. Homes that once demanded a price only affordable to successful professionals are now going to auction for far less than $200,000.

3,405 home owners were were forced to move in Cincinnati after their homes were placed on the auction block this summer. Columbus also faces a large foreclosure problem with 4,099 homes recently listed as foreclosures. Smaller communities face the same issues as metropolitan areas, but do not have as many foreclosures and short sales. The southern Ohio cities of Jackson, Athens and Logan each have less 20 repossessed homes listed for sale.

When a home is in foreclosure, there are often also unpaid real estate taxes attached to the property. Local governments and schools around the state are suffering due to the growing amount of delinquent property taxes.

Homeowners in general are impacted by the growing list of foreclosures. The steeply discounted prices on short sale and foreclosed homes drives down the price of similar homes in the same area. Banks require a real estate appraiser to use comparable homes to determine current market value during the loan process. When your neighbor cannot pay his mortgage and his house is sold at a foreclosure auction, your home is now worth less in the eyes of lenders and appraisers.

There is some hope. In June 2011, there has been a slowdown in the rate of foreclosure filings and of repossessions. The courts nationally have also become more aggressive about challenging foreclosures. In January 2011, Massachusetts’s top court voided the seizure of two homes by Wells Fargo & Company and US Bancorp after the banks failed to show that they held the mortgages at the time of the foreclosures, and courts in several states are considering similar cases.

In an unexpected twist, lawyers from Dworken & Bernstein law firm insisted that any unclaimed funds in a settlement with Wells Fargo and CitiFinancial from a class action case regarding unreleased mortgage liens be turned over to charities instead of being returned to the defendants.

Due to this “cypres” legal doctrine, 20 Ohio charities will be able to continue their work with new funding. The charities that benefited from this donation included Neighborhood Housing Services of Greater Cleveland, Project Love, The E Prep School, The Arc, Society for Rehabilitation, Malachi House, Trinity Episcopal Cathedral, University Hospitals, The Gathering Place, Cornerstone of Hope, Antioch Community Development, Ohio College of Podiatric Medicine, and Gordon Square Arts District.

Many class action suits end up with unclaimed funds, and this doctrine can be applied to all of them, but often the unclaimed funds just go back to the defendants. Since they are being asked to give up the funds to rectify a wrong, it makes more sense for the unclaimed funds to go out into the community to help those in need of a hand up. Class action suits are brought to “fight city hall” so to speak, and it is not often enough that the little guy manages to win against the big corporation. Certainly we see evidence all of the time of when the big guy wins.

Corruption is rampant when no one is watching, and unfortunately class action suits are the only way to get our own back. Certainly the people that are affected by the injustice committed by the defendants would prefer that the unclaimed money go to the community instead of back to the defendant.

For the first time in Ohio, and one of the few times across the U.S., a grand jury has indicted 9 employees of a California based loan company, Argent Mortgage Inc., for their suspected roles in approving fraudulent home loans. So far it has been rare that any home loan companies have actually had criminal charges brought against them, whether they approved subprime home loans or not.

Argent Mortgage, Inc. was one of the biggest originators of home loans in Cuyahoga County from 2003 to 2005, and was sold to Citibank in 2008. This particular case has been investigated by the Cuyahoga County Mortgage Fraud Task Force, and shows how the lending practices of Argent and other subprime lending companies were responsible for the foreclosure crisis that has decimated Cleveland, Ohio and many of its area suburbs.

The indictment of the Argent employees alleges that they helped coach mortgage brokers about how to falsify loan documents so that they misstated the source or existence of down payments and also borrowers’ income and/or assets.

According to the case, employees at an Argent loan processing center in Illinois approved the loans even though they KNEW that their own company’s lending rules had not been satisfied. Argent employees bent the rules in order to get the loans approved so that they would get higher wages and bonuses.

Subprime loans have been viewed as a major cause of the downfall of the banking industry, as these popular loans during the housing boom between 2000 and 2007 were given with little or no proper documentation in order to get approved. Because of these loose lending practices, many speculative property purchases were made, and fraudulent practices abundant.

The indicted included 3 Argent account executives assigned to work with mortgage brokers in Northeast Ohio, and two supervisors and four underwriters who were responsible for ensuring that the company’s lending standards were being met. This investigation into Argent employees grew out of a Cuyahoga County case being prosecuted against Ur Gofman, owner of Cleveland based REal Asset Fund. Gofman was indicted in August 2008 in Cuyahoga County Common Pleas Court for his role in what prosecutors are calling one of the biggest mortgage fraud schemes in U.S. history. Gofman was convicted this year in U.S. District Court of mortgage fraud related charges. Sentencing in this case is scheduled for this week.

Greater Cleveland, Ohio (which includes Cleveland and the outlying suburbs) has actually been doing an admirable job of adding employment opportunities for people out of work, even in a weak economic recovery. Unfortunately, the jobs that people are getting pay less than they did before the economic downfall.

According to the Brookings Institution’s MetroMonitor, which is a project measuring economic performance in the 100 largest metro areas of the United States, while the Cleveland-Elyra-Mentor area gained jobs in the first quarter of 2011, economic output in the area fell. This a common trend in the economic recovery patterns over and over again, in many areas.

The report showed that Cleveland ranked second in terms of places that have brought down their unemployment rate, but is still struggling in economic output (the value of goods and serviced produced in the region). Part of the problem is how productivity is measured. Manufacturing jobs get higher points on the productivity scale because they pay more than lower paying service jobs. Manufacturing is a key post-recession job growth factor in Ohio and neighboring states.

Local experts say that there is still reason for hope. Early figures show that the Cleveland area continued to add obs during the second quarter of 2011, including jobs in the business and professional sector, which are also higher paying jobs. Cleveland has a very large medical professional community due to the many high level hospitals like the Cleveland Clinic and University Hospitals systems. In many ways, the medical industry is what is driving much of Cleveland’s economic growth and stability, and creating jobs for people that will eventually turn into home buyers as they settle in the Cleveland area.

The Ohio housing market is still quite sluggish, even during the time of year when housing sales usually go up due to better weather and ease of moving. This trend is quite disappointing for real estate sellers, who are blaming part of the home sales slump on bad weather, high gas prices, and the difficulty in getting mortgage loans these days.

Last spring, home sales were up due to a very popular home buyer tax credit, but that is not available for home buyers now, so there is less incentive to take a risk this year.

Sales of homes in Northeast Ohio rose in May, however they were still behind May of 2010. This pattern was followed across the state of Ohio. Home sales were 20.8% lower than last year at this time (Ohio Association of Realtors). In Northeast Ohio, sales of new and existing homes rose 6.8% last month, but were down 17.3% from May 2010. Condo sales, however, jumped 35.7%, but were 4.6% lower than May 2010. Data is provided form the Northeast Ohio Real Estate Exchange.

Most analysts say that buyer demand is just sluggish, and buyers are sitting on the sidelines waiting to see what is happening. The average price for a house in Northeast Ohio in May was $121,447, while the average price for a condo was $117,742.

Yippee! Ohio is in the running to be the highest home foreclosure state in the U.S. Out of 50 states in the union, we are the 13th highest. This is not a race that we want to win, folks. We want to lose this race.

RealtyTrac is a company that tracks statistics related to real estate issues, and in the last few years foreclosure stats have been highly tracked. Ohio’s statistics for May show that one out of every 608 households in the state received a foreclosure notice. RealtyTrac’s report went on to say that Ohio saw nearly 8,400 foreclosure filings last month. Filings include default notices, auction-sale notices and bank repossessions.

So is there anything we can do to get our real estate crisis back on track, building instead of foreclosing? It all comes back to jobs. We need more good jobs in Ohio to help people get back to paying their bills on time. This will kick start the economy in all directions as people with jobs spend more money in stores which in turn infuses the state with more corporate buying.

RealtyTrac says the number of homeowners nationwide who were put on notice for being behind on their mortgage payments fell in May to the lowest level since 2006. The decline was the result of a slowing housing market and lingering delays in banks’ foreclosure process not really any new construction or an upswing in home buying.

Mortgage lenders also took back fewer properties in May, the second down month in a row. Repossessions have been held up as many lenders continue to work through foreclosure documentation problems that surfaced last fall in compliance with federal regulators’ demands.

Home building in Ohio is coming off the worst 2 years on record dating back 5 decades. Data in from May suggests that the trend is continuing. The construction of single family homes is a significant economic indicator. 80% of all residential construction is single family homes, and that construction is still way down.

Most of the housing permits for new construction are for apartments and condominiums which have become preferred housing with the relative ease of renting instead of investing in a new mortgage. For Americans who lost their jobs in the recession, and were forced to give up their homes due to foreclosure, renting is a safer, more secure option.

The impact of new home construction is felt around the entire local economy, as the purchase of a new home generates approximately 3 new jobs and $90,000 in taxes for the community. New home buyers also tend to spend more on purchases for the home like new appliances, furniture, landscaping, and home improvements. Apartment dwellers do not spend the same kind of money on their apartments.

Because of the large percentage of foreclosed homes in Ohio, resale homes are much more attractive to many home buyers than new home construction. Buying a newly constructed home in Ohio is about 34% higher than a foreclosed home, which is more than 2 times higher than it would be in a normal healthy housing market.

Until the majority of the foreclosed homes in Ohio are bought, and the mortgages reinstated, new home construction will remain low.

Not sure what this means for homeowners in foreclosure, but BauerFinancial Inc., an independent rating company, announced that 3 of the 14 largest banks operating in Greater Cleveland–Huntington, U.S. Bank, and Park View Federal Savings–saw their financial strength increase last quarter. This is significant news because the ratings do not change often. Out of the 34 banks that operate in Northeast Ohio, only 1 bank, Home Savings Bank of Kent, had their rating go down from 4 stars to 3.5 stars.

In more good news, banks are getting healthier in the entire state of Ohio, 71% of them earning a 4 star or higher rating based on the first quarter of 2011. Banks with ratings of 4 stars or above are considered excellent, and are recommended to businesses. Ohio’s banks are actually stronger than the overall rating across the United States. The nation’s overall bank rating was 61% excellent. However, the bad news is that there are still plenty of troubled banks in the U.S., 5.9% of Ohio’s banks are troubled.

While it is good to hear that Ohio’s banks are getting stronger, they still have a long way to go until the local economy has recovered from the mistakes that many of the banks made on mortgages, and foreclosures. Still if you need to rely on a bank, which most of us do, it is good to know that the bank is not about to go under. If you want to look up the stability of your own bank, and what the star ratings mean, you can go to the BauerFinancial website and look it up.